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Network Effects and Welfare Cultures

Author

Listed:
  • Marianne Bertrand
  • Erzo F. P. Luttmer
  • Sendhil Mullainathan

Abstract

We empirically examine the role of social networks in welfare participation using data on language spoken at home to better infer networks within an area. Our empirical strategy asks whether being surrounded by others who speak the same language increases welfare use more for those from high welfare-using language groups. This methodology allows us to include local area and language group fixed effects and to control for the direct effect of being surrounded by one's language group; these controls eliminate many ofthe problems in previous studies. The results strongly confirm the importance of networks in welfare participation.

Suggested Citation

  • Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 1019-1055.
    • Handle: RePEc:oup:qjecon:v:115:y:2000:i:3:p:1019-1055.
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    File URL: http://hdl.handle.net/10.1162/003355300554971
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    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • F39 - International Economics - - International Finance - - - Other
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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